What Is Replace-by-Fee (RBF)?
From The Weekly BOLT ยท
Last week we covered transaction fees, the economic mechanism that gets your Bitcoin transaction included in a block. This week: what happens when you guess wrong about the fee, and how Bitcoin lets you fix it.
The Basics: When you broadcast a Bitcoin transaction, you attach a fee. If the network is quiet, a low fee gets confirmed quickly. But if you send at a low fee and the network suddenly gets busy, your transaction can sit unconfirmed for hours or even days, stuck in the mempool while higher-paying transactions jump the line. Replace-by-Fee (RBF) is the protocol feature that lets you "bump" that stuck transaction by rebroadcasting it with a higher fee. Miners then include the new, better-paying version. The old one gets discarded. You regain priority.
Why It Matters: RBF is a direct expression of Bitcoin's market-based fee model. In traditional finance, if you send a wire and regret the timing, you're stuck. The transaction is out of your hands. With RBF, you retain economic control even after broadcasting. You can always outbid yourself for priority. It also prevents the fee market from becoming a trap during volatile periods, if fees spike 10x in an hour because of network congestion, users with stuck transactions aren't locked out, they just pay more to catch up.
There's a tradeoff. RBF transactions are flagged as "replaceable" until they confirm, which means merchants accepting unconfirmed Bitcoin payments can't fully trust them, the sender could theoretically rebroadcast with a different recipient. This is why serious merchants wait for at least one confirmation, and large transactions typically wait for six. RBF makes the fee market more efficient at the cost of making zero-confirmation payments less reliable. Bitcoin chose efficiency.